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Is The UAW Running Out of Money? - DrivingScene

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Is The UAW Running Out of Money?

Posted on 25 September 2011 by Adam Kaslikowski

Adam Kaslikowski
9/25/11

The United Auto Workers is in dire straits at the moment. They’ve done some “back of the napkin” calculations and discovered that they will run into serious financial problems in 5 years if something drastic doesn’t change at their organization.¬† With that looming over their heads, they are getting desperate. Case in point – they were planning on buying an ad during this year’s Superbowl to try and turn public opinion against foreign automakers who have spurned unionization. It would have cost over $3 million. Keep reading¬† to see how they got here…

When the recession of ’08 started, the Big 3 automakers took a pounding and as a result had to lay off many manufacturing jobs. This sent the UAW’s income from dues into an even sharper nose-dive than it had previously already been in. In fact, membership has declined a startling 75% since its peak of 1.5 million in 1979. Even with their declining membership, the UAW is still the richest union in America with total assets of $1 billion. The vast majority of those assets are basically rainy day money, and thus the UAW has it stocked away in various investments and real-estate. What else got beaten down by the recession? Financial investments and real estate values. The double whammy of declining dues and negative investments accelerated the UAW’s current situation and necessitated that “back of the napkin” math that so painfully spells out the UAW’s future.

Out of a total of $1 billion in assets, $763 million belongs to the union’s strike fund. The reason the UAW knew that they were suddenly getting poor is because they have had to dip into the supposedly untouchable strike fund to keep operating. So how do they get out of this mess of basically living off their savings till they are all gone? A couple of things need to happen starting with bringing currently non-union foreign OEM factories under UAW control and making their financial investments more aggressive (read risky”). The union needs these currently non-unionized factories just to balance their budget. The major obstacle to this goal is that the UAW has little to offer to the employees. The German and Japanese plants are already paying their employees wages that are equal to above what the union has worked so hard to negotiate away from domestic automakers. Even with more aggressive marketing, proposed strikes, and both good cop and bad cop tactics, the UAW just can’t tempt workers to unionize if they aren’t going to be able to secure them higher wages.

With the recession hitting them from both ends, the rise of foreign factories in southern “Work-At-Will” states and a relatively new president, the UAW is certainly in for some changes. Whether these changes help or hurt in the long term remains to be seen, but pain in the near term is almost assured as they reorganize and restructure to meet these new changes. Bottom line, if the UAW doesn’t figure out some way to unionize the factories throughout the South and gain their dues as income, they are going to be in a deep hurt in 5 years.

Source: autonews.com

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